The Sponsorship Impact of Russia's Soccer Sanctions

When people are losing their lives to save their country’s freedom, entertainment such as sports feels insignificant and yet it has become one of the sanctions against Russia that it will feel for years to come following its invasion of Ukraine. The sporting sanctions of the last week have been widespread, led by the International Olympic Committee (IOC) which has declared the country to have violated the Olympic Truce. The repercussions of instigating war Just four years ago Russia hosted soccer's greatest international spectacle, the FIFA World Cup. It was an event Putin coveted in an effort to build the country's sporting prominence. As a result of his own actions, he has now seen his country's teams banned from competing in the organization’s future tournaments. In Ukraine, We as Creatives Now Have One Assignment: Defend Our Land and Stop the War As a result, soccer club Spartak Moscow, sponsored by Russian oil and gas brand Lukoil, was thrown out of being one of the final 16 clubs remaining in this year's Europa League competition. In response, the club released a statement highlighting that it found the decision to be “extremely upsetting” and noted that it did not agree but was “forced to obey.” The statement also said: "Spartak has millions of fans not only in Russia but all over the world. Our successes and failures bring people from dozens of different countries together,” and added that the club would now focus on domestic competitions. Even more significant decisions were made involving the Gazprom Stadium in St. Petersburg, the naming rights for which are held by the country’s largest energy provider. Gazprom Stadium was set to host the UEFA Champion’s League final, but the country’s teams have been banned from playing in European competitions and the stadium was stripped of the game—it will now be held in Paris instead. “Football is fully united here and in full solidarity with all the people affected in Ukraine. Both Presidents hope that the situation in Ukraine will improve significantly and rapidly so that football can again be a vector for unity and peace amongst people,” ended the statement from UEFA outlining the suspensions that will be upheld until further notice. Poland and Sweden had already taken a stance on the matter prior to the ban being announced. The two countries stated that they would not accept playing against the Russian men’s team, which they had been planning to face in the upcoming World Cup playoffs. Other national countries had also refused to play the team. Meanwhile Russia's woman’s team will no longer be allowed to participate in the European Championships in England this summer. The long-term impact “The entire sports economy of Russia has been set back by this and it'll take a lifetime to repair it. It could be that significant. Even with regime changes, it would be a task for the Russian Grand Prix to start up again or to see Russia hosting anything IOC-related for a long time. The entire sporting economy of Russia is in real trouble at this point,” stated Conrad Wiacek, head of sports analysis at data analytics company GlobalData. Wiacek also cited the presence of major western brands—such as Puma, Adidas and Nike—that supply soccer uniforms to Russian athletes and have deals valued collectively at over $30 million alongside three other uniform suppliers in the Russian league. Adidas has now ended its annual $10 million uniform partnership with Russian football, Reuters has reported. According to Global Data Sport's figures, $180 million was spent across all sports in Russia annually and $618.3 million was spent across the length of those contracts in total. Meanwhile $419 million is being paid by Russian brands over the course of their contracts in deals running outside of the country—annually that is $132.5 million—just related to soccer. When growing an international footprint, that’s what domestic brands use sponsorship for if they are looking to expand.Conrad Wiacek, head of sports analysis at data analytics company GlobalData That includes energy giant Gazprom which saw its long-running sponsorship with UEFA, reportedly worth $45 million a year, torn up in recent days. Gazprom was the biggest brand sponsor for UEFA and until last month had deals with German soccer club FC Shalke 04. It's important to note that Russia is the largest gas supplier to the country. "The board of directors of FC Schalke 04, with the approval of the supervisory board, decided to prematurely end the partnership between S04 and Gazprom,” the club confirmed. The brand was also a sponsor of the Champion’s League. Meanwhile Manchester United has just ended its long-standing sponsorship with Russian airline Aeroflot. Russian sports betting firms are lucrative as sponsors across Europe, with Russian brands supporting English Premier League clubs such as Everton, Aston Villa, Leicester FC as well as Chelsea, owned by Russian billionaire Roman Abramovich, who announced today that he is selling the club. On Wednesday, Everton suspended all commercial arrangements with Russian companies which included the naming rights for its new stadium set to open for 2024, sold to Russian billionaire Alisher Usmanov, the BBC reports.Meanwhile, Russian sports betting brand Fonbet has a $2.5 million deal with Spanish giants Real Madrid that runs until the end of the following soccer season in 2022/2023. "Adidas and similar companies pausing sponsorships will see a negative effect as many have already paid to sponsor these events so they won't see a return on their investment," commented Baruch Labunski who runs Canadian search agency Rank Secure. "That's a lot of money that now may not be there. This will hurt sports as they depend on dollars to do things like broadcast but also hurts companies branding as they depend on constant sports broadcasting for marketing. The ripple could even be passed down to consumers in some cases because someone has to make up for lost dollars." And there are major Western brands supporting teams in Russia too—Chevrolet is a sponsor of Dynamo Moscow, Pepsi and Lays are sponsors of Zenith St. Petersburg, as is Nissan, while Volkswagen has been the official car brand of the Russian national team since 2019. "When growing an international footprint, that’s what domestic brands use sponsorship for if they are looking to expand,” explained Wiacek. “The collective actions by athletes, teams, brands and sports organizations will all have an important effect on the international community,” stated John Shea, CEO of Octagon Sports and Entertainment Network while discussing wider sporting sanctions brought upon Russia. He also believes that sports can have “a catalyst for change” when it comes to injustice. While the country is likely to become a global pariah following its actions in recent days, the world has moved to ensure it will pay in many significant ways. The ramifications of the sanctions Russia faces will hit its sporting power, lessening the money it can make on the world’s stage and reducing the ability to sign premium players internationally due to less revenue being generated from teams appearing in non-domestic competitions. The sport will recede, which will be a blow to the passionate supporters—which Putin is thought to be—while the international prospects of its businesses will also decline as a consequence of its violent actions towards its neighbor. D&AD Continues to Accept Russian Entries for 2022 Awards—Donates Fees to Ukraine

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The Sponsorship Impact of Russia's Soccer Sanctions

Russian and international brands are seeing their deals revoked and reviewed as a result of the invasion of Ukraine

The repercussions of instigating war

Stephen Lepitak

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The repercussions of instigating war

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Stephen Lepitak